1
EXHIBIT 10.5
NANOGEN, INC.
1997 STOCK INCENTIVE PLAN
NONQUALIFIED STOCK OPTION AGREEMENT
Nanogen, Inc., a Delaware corporation (the "Company"), hereby grants an
Option to purchase shares of its common stock ("Shares") to the Optionee named
below. The terms and conditions of the Option are set forth in this cover sheet,
in the attachment and in the Company's 1997 Stock Incentive Plan (the "Plan").
Date of Xxxxx:
-----------------------------------------------------------------
Name of Optionee:
--------------------------------------------------------------
Optionee's Social Security Number:
---------------------------------------------
Number of Shares Covered by Option:
--------------------------------------------
Exercise Price per Share: $
---------------------------------------------------
Vesting Start Date:
------------------------------------------------------------
BY SIGNING THIS COVER SHEET, YOU AGREE TO ALL OF THE TERMS AND
CONDITIONS DESCRIBED IN THE ATTACHED AGREEMENT AND IN THE PLAN, A COPY
OF WHICH IS ALSO ATTACHED.
Optionee:
----------------------------------------------------------------------
(Signature)
Company:
-----------------------------------------------------------------------
(Signature)
Title:
----------------------------------------------------------
2
NANOGEN, INC.
1997 STOCK INCENTIVE PLAN
NONQUALIFIED STOCK OPTION AGREEMENT
NONQUALIFIED STOCK This Option is not intended to be an incentive stock
OPTION option under section 422 of the Internal Revenue Code
and will be interpreted accordingly.
VESTING Your Option vests monthly over a four year period
beginning on the Vesting Start Date as shown on the
cover sheet. The number of Shares which vest under this
Option at the Exercise Price shall be equal to the
product of the number of months of your continuous
service with the Company ("Service") (including any
approved leaves of absence) from the Vesting Start Date
times the number of Shares covered by this Option times
1/48. The resulting number of Shares will be rounded to
the nearest whole number. Notwithstanding the above, no
shares will vest until you have performed twelve months
of Service from the Vesting Start Date. This Option
shall be fully vested upon a Change in Control as
defined in the Plan. Change in Control does not include
any public offering of Shares. No additional Shares will
vest after your Service has terminated for any reason.
TERM Your Option will expire in any event at the close of
business at Company headquarters on the day before the
tenth anniversary of the Date of Grant, as shown on the
cover sheet. (It will expire earlier if your Service
terminates, as described below.)
REGULAR TERMINATION If your Service terminates for any reason except death
or Disability, your Option will expire at the close of
business at Company headquarters on the 90th day after
your termination date. During that 90-day period, you
may exercise that portion of your Option that was vested
on your termination date.
DEATH If you die while in Service with the Company, your
Option will expire at the close of business at Company
headquarters on the date twelve (12) months after the
date of death. During that twelve-month period, your
estate or heirs may exercise that portion of your Option
that was vested on the date of death.
-2-
3
DISABILITY If your Service terminates because of your Disability,
your Option will expire at the close of business at
Company headquarters on the date twelve (12) months
after your termination date. During that twelve-month
period, you may exercise that portion of your Option
that was vested on the date of your Disability.
"Disability" means that you are unable to engage in any
substantial gainful activity by reason of any medically
determinable physical or mental impairment.
LEAVES OF ABSENCE For purposes of this Option, your Service does not
terminate when you go on a bona fide leave of absence
that was approved by the Company in writing, if the
terms of the leave provide for continued service
crediting, or when continued service crediting is
required by applicable law. However, your Service will
be treated as terminating 90 days after you went on
leave, unless your right to return to active work is
guaranteed by law or by a contract. Your Service
terminates in any event when the approved leave ends
unless you immediately return to active work. The
Company determines which leaves count for this purpose,
and when your Service terminates for all purposes under
the Plan. The Company also determines the extent to
which you may exercise the vested portion of your Option
during a leave of absence.
NOTICE OF EXERCISE When you wish to exercise this Option, you must execute
complete and file a Notice of Exercise with the Company.
Your exercise will be effective when it is received by
the Company. If someone else wants to exercise this
Option after your death, that person must prove to the
Company's satisfaction that he or she is entitled to do
so.
FORM OF PAYMENT When you submit submit your Notice of Exercise with the
Company, you must include payment of the Exercise Price
for the Shares you are purchasing. Payment may be made
in one (or a combination) of the following forms:
o Your personal check, a cashier's check or a money
order.
o Shares which you have owned for six months and
which are surrendered to the Company. The value
of the Shares, determined as of the effective
date of the Option exercise, will be applied to
the Exercise Price.
o To the extent that a public market for the Shares
exists as determined by the Company, by delivery
(on a form prescribed by the Committee) of an
irrevocable direction to a securities broker to
sell Shares and to deliver all or part of the
sale
-3-
4
proceeds to the Company in payment of the
aggregate Exercise Price.
o Any other form of legal consideration approved by
the Committee.
WITHHOLDING TAXES You will not be allowed to exercise this Option unless
you make acceptable arrangements to pay any withholding
or other taxes that may be due as a result of the Option
exercise or the sale of Shares acquired upon exercise of
this Option.
RESTRICTIONS ON By signing this Agreement, you agree not to sell any
EXERCISE AND RESALE option shares at a time when applicable laws or Company
policies prohibit a sale. This restriction will apply as
long as you are in the Service of the Company (or a
subsidiary).
TRANSFER OF OPTION Prior to your death, only you may exercise this Option.
You cannot transfer or assign this Option except as
expressly permitted in the Plan for revocable trusts or
as approved by the Committee. For instance, you may not
sell this Option or use it as security for a loan. If
you attempt to do any of these things, this Option will
immediately become invalid. You may, however, dispose of
this Option in your will.
Regardless of any marital property settlement agreement,
the Company is not obligated to honor a Notice of
Exercise from your spouse or former spouse, nor is the
Company obligated to recognize such individual's
interest in your Option in any other way.
RETENTION RIGHTS This Agreement does not give you the right to be
retained by the Company in any capacity. The Company
reserves the right to terminate your Service at any time
and for any reason.
SHAREHOLDER RIGHTS Neither you, nor your estate or heirs, have any rights
as a shareholder of the Company until a certificate for
the Shares acquired upon exercise of this Option has
been issued. No adjustments are made for dividends or
other rights if the applicable record date occurs before
your stock certificate is issued, except as described in
the Plan.
ADJUSTMENTS In the event of a stock split, a stock dividend or a
similar change in the Company's Stock, the number of
Shares covered by this Option and the Exercise Price per
share may be adjusted pursuant to the Plan. Your Option
shall be subject to the terms of the agreement of
merger, liquidation or reorganization in the event the
Company is subject to such corporate activity.
-4-
5
APPLICABLE LAW This Agreement will be interpreted and enforced under
the laws of the State of California (without regard to
their choice of law provisions).
THE PLAN AND OTHER The text of the Plan is incorporated in this Agreement
AGREEMENTS by reference. Certain capitalized terms used in this
Agreement are defined in the Plan.
This Agreement and the Plan constitute the entire
understanding between you and the Company regarding this
Option. Any prior agreements, commitments or
negotiations concerning this Option are superseded.
BY SIGNING THE COVER SHEET OF THIS AGREEMENT, YOU AGREE TO ALL OF THE
TERMS AND CONDITIONS DESCRIBED ABOVE AND IN THE PLAN.
-5-
